A new form of for-profit social entrepreneurship | Social ...

I am reading a fair amount on social entrepreneurship ideas these days. It is an exploding area in our society, with many new books coming onto the market.

A book I plan to use in one of my classes is Creating a New Civilization through Social Entrepreneurship (published 2011, edited by Patrick Petit). The forward to the book is by Muhammad Yunus, an economics professor in Bangladesh who won a Nobel Peace Prize for giving loans of only a few dollars to poor people in Bangladesh who wanted to start small street businesses.

Professor? Yunus started by lending his own money, the first loan being $27 to several families. This was the beginning of what has been called microcredit, the loaning of small amounts of money to very poor people with no collateral required.

The word ?grameen? means village, and Mr. Yunus eventually started what he called Grameen Bank. The clients of Grameen Bank are the owners of the bank. This social entrepreneurship project has changed parts of our world.

The above is a very brief introduction to some of the work of Professor Yunus. My reason for introducing him is to share one of his broad ideas expressed in the Foreword of the book I earlier mentioned.

Professor Yunus proposes the establishment of what he calls social businesses. His notion of a social business is one that is explicitly created to assist people in need but has the capability of making profit. However, all money made in a social business would go back into serving people in need.

So far this sounds like an income-producing nonprofit corporation, but there is more.

Yunus suggests that one form of social business involves socially conscious investors who contribute money to the business, receive their investment back, but receive no dividends. All profit for this type of business would be used to expand outreach and improve the services delivered to people in need.

The big difference between Yunus? notion of social business and a nonprofit corporation is that in a social business, contributors can get back their money if the business is successful.

This is a fascinating idea, a hybrid between for-profit and nonprofit corporations. In this new idea, no money is given away by the donors. Rather, it is like the money is on loan to be returned to the contributor with no interest.

Yunus has a big idea ? he visualizes a separate stock market with all the formality that is a part of the existing stock market. There is huge complexity here, but what if?

I like the idea of socially conscious people loaning their money to an organization whose core purpose is to assist people in need. If money could be returned to the donors (as long as sales of a product are adequate), then this seems to bring so much more potential to fund raising for the purpose of helping people in need.

For the last couple of days I have been thinking about Yunus? idea, and I simply want to share it with you. This idea greatly impresses me.

Thank you for reading my small blog.

Best wishes. ? Keith

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